Tackle deforestation at source: Oilseed, grain industry

The EU grains, compound feed and oilseeds industry has flagged the "wrong approach" from the European Commission on a proposed law to combat deforestation, emphasising that the problem should be addressed at its source, in partnership with producing countries.

Industry associations Fediol, Coceral and Fefac said that their industries are "committed to improving their sustainable practices" and are supportive of the EU's role in tackling deforestation. But "practical solutions are needed to steer change on the ground," the associations said.

The commission's proposed regulation, published on 17 November, concentrates on due diligence requirements for operators and traders, to ensure that various agricultural commodities produced on land subject to forest degradation or deforestation after 31 December 2020 do not enter or exit the EU market. It also proposes a country benchmarking system for deforestation linked to the commodities named — including palm and soy products. Palm- and soy-based biofuels make up roughly a third of EU consumption, industry calculations suggest, though some member states have already moved to phase these out, and the EU's recast Renewable Energy Directive II sets a 2030 deadline for a ban on palm oil-based biofuels.

But these requirements prioritise "the objective of ‘clearing up' EU supply chains," rather than addressing the issue at origin, the associations said. "We are concerned that the regulation would not have the desired impact in producer countries, where deforestation remains a serious issue," Coceral president Philippe Mitko said.

And the due diligence obligations translate into "detailed requirements for traceability, including geo-localisation of the farm or plot of production, transmission of information and physical segregation of products," the associations said. These requirements do not reflect the market reality and risk excluding small players, Fediol president Jordi Costa said. "The commission does not leave room for tailored approaches adjusted… to smallholders, good farmers in problematic areas or developing countries in their attempt to improve their production practices," Costa added.

The proposal notes that the commission will take into account a country's engagement in fighting deforestation and forest degradation, with due diligence requirements varied depending on whether countries are categorised as low, standard or high risk. But this is another area of concern for the industry, according to compound feed association Fefac. "If sourcing from countries that are considered high-risk gets too complicated, the supply chain will adjust to risk-avoidance," Fefac president Asbjorn Borsting said.

The draft proposes penalties including fines — up to 4pc of the operator's or trader's annual turnover in the member states concerned — and the prospect of confiscation of products and revenues.

Some of the world's leading agricultural commodities producers pledged at the UN's Cop 26 climate summit earlier this month to accelerate their commitment to halting forest loss associated with the sector.

By Georgia Gratton